B-11.

01

Scott Drilling Company owns an oil and gas drilling rig. The company is continually
spending money to repair, maintain, refurbish, and upgrade this unit. Below is a listing of
various costs incurred. Indicate, by placing check marks in the appropriate boxes, if each
cost is a "capital" or "revenue" expenditure. If a capital item, indicate whether the cost is
more likely considered to be a "replacement" or a "betterment."

CLASSIFICATION: FOR CAPITAL ITEMS:

Replaceme
Capital Revenue Betterment
nt

Routine cleaning and repainting 

Replacement of expensive
cables and pulleys

Addition of directional drilling

motor

Safety inspection fee

Raising and lowering rig at

each new drill site

Interest cost on loan to buy rig

Installation of additional
advanced lighting system
technology

Turntable, deck, and bearings

in place of similar worn out unit

Lubrication of all moving parts

Welding broken outrigger

mount

Installation of anti-slip flooring

on all smooth surface walk
ways
Name:
B-11.01
Date: Section:

CLASSIFICATION: FOR CAPITAL ITEMS:

Replaceme
Capital Revenue Betterment
nt

Routine cleaning and repainting 

Replacement of expensive
cables and pulleys

Addition of directional drilling

motor

Safety inspection fee

Raising and lowering rig at

each new drill site

Interest cost on loan to buy rig

Installation of additional
advanced lighting system
technology

Turntable, deck, and bearings

in place of similar worn out unit

Lubrication of all moving parts

Welding broken outrigger

mount

Installation of anti-slip flooring

on all smooth surface walk
ways